General Election 2010: Northern Rock customers to get shares

Shares in Northern Rock will be handed to its customers under plans in
Labour's manifesto to turn the troubled bank back into a building society.

The bank disclosed that 12,100 borrowers with the controversial Together mortgage have fallen into arrearsPhoto: PA

By Andrew Porter

7:00AM BST 12 Apr 2010

The failed bank, that had to be nationalised to halt a banking industry meltdown, will be 'mutualised' in an attempt to boost competition in the building society market for mortgages and savings products.

It will allow Labour to argue that the symbol of the financial crisis has been turned around by Labour's action. Gordon Brown will use today's manifesto launch in Birmingham to again argue that only his intervention to halt the run on the banks prevented a wider economic collapse and likely depression.

The plan will be contained in the economic section of Labour's 10 chapter policy document.

Also included will be a controversial plan to prevent foreign firms from taking over a British company where it is deemed not to be in the national interest. That policy has been described as a knew-jerk response to the Kraft takeover of Cadbury.

Ministers are angry that assurances they received from the Kraft board regarding jobs at the confectionary firm were not kept and job losses have hot Labour so close to a general election.

Gordon Brown adopting a "Cadbury law" will be seen as a victory for the Unite union which bankrolls Labour. The union has argued that weak takeover rules allowed the Kraft buy-out which put the interests of employees second.

A Commons committee has reported that it was 'unwise' of Kraft, an American company, to promise to save a Cadbury plant near Bristol. It was subsequently announced that it would close.

Among the other measures included in today's manifesto:

* paid paternity rights for fathers extended from two to four weeks.

* new rights for grandparents to be able to see their grandchildren after a family divorce.

* Re-establishing the link between earnings and the state pension from 2012.

* Giving parents the right, through a ballot, to get rid of headteachers and school management teams.

* All basic rate taxpayers between 18 and 30 will be offered the chance to save money in a government-backed "Super ISA".

* Trains companies will be forced to sell passengers the cheapest tickets available.

* Golden handcuffs for the best teachers to stay at poor performing schools to turn them round.

* Freezing the basic, higher and new top rates of income tax for the next parliament.

* a commitment to build 50,000 new council homes.

But the manifesto will not contain any new spending commitments. Ed Miliband, who has drawn up the 100-page manifesto, said it would have more in common with the 1997 agenda than those offered in 2001 and 2005.

The manifesto on which Tony Blair was elected in 1997 was cautious on spending, pledging to stick temporarily to Conservative plans, while the next two elections saw Labour fight on a platform of investment in public services.

Mr Miliband told Sky News: "There is less money around. We are not going to go around spraying around promises we can't afford, like the Conservative Party is doing, including on National Insurance.

"Everything will be very tightly costed and there won't be big spending commitments. I think that's right."

He added: "Every policy in our manifesto will pass the tests of credibility, the future and fairness: designed to help improve the lives of ordinary, lower and middle income families in Britain."